German Auto Industry Expected to Lose 100,000 Jobs in Next Four Years

Conservative  Treehouse 

The heart of the European industrial economy is Germany, and there’s major trouble afoot within the largest industrial sector within Germany.

Following the “Build Back Better” agenda, the EU went all in for green energy proposals.  EU banking and finance followed suit, funding investment capital for electric vehicles (EVs) to replace combustion engines.  Unfortunately, this put the EU, specifically Germany, in the position of competing against the largest EV industrial base in the world, China.

The second major flaw was capital only flowing to the EV sector, and Europeans -along with the majority of the industrial west- are just not buying EVs at a production capacity to match prior investment.

Put it all together and Germany is trying to compete with China to produce a product their consumer base doesn’t want.

GERMANY – ZF Friedrichshafen’s announcement that it is cutting 7,600 positions adds to the German supplier industry’s troubles as parts makers struggle to manage the shift to EVs, along with falling demand for combustion engine components and increased competition from Chinese suppliers.

Including job losses at Volkswagen, Audi, and Porsche, the German auto industry is expected to eliminate nearly 100,000 jobs by 2030, according to an analysis by Bloomberg.

Bankruptcies among German suppliers are climbing sharply, with 30 percent more expected in 2025 compared with last year, according to a report from consultancy Falkensteg.

Between January and August, Falkensteg recorded 36 supplier bankruptcies, up from 33 the previous year. The report tracked suppliers with revenue of at least €20 million ($23.5 million) until 2024.

In the second quarter, the automotive supply and electrical engineering industries each recorded 11 corporate insolvencies, the highest number across all sectors, according to the survey, which was reported in Automotive News Europe’s sibling publication Automobilwoche. In the first quarter, 18 supplier bankruptcies were registered. (read more)

Against the simultaneous backdrop of major European countries banging Ukraine/Russia war drums, and against historic reference points, it is a little unnerving to hear about severe contraction within the German economy.